Court ruling9/24/2026

High Court Separated Urgent Expenditures and Froze Transfers of NIS 409 Million

The High Court of Justice temporarily suspended the transfer of approximately NIS 409 million in coalition funds approved by the Knesset Finance Committee during the election recess. At the same time, the Court allowed the transfer of uncontested urgent funds, including funds for the rehabilitation of communities in northern and southern Israel.

Key facts

•Court: Supreme Court of Israel sitting as the High Court of Justice—Bagatz
•Temporary halt of the transfers: August 5, 2026
•Interim orders and orders nisi: August 24, 2026
•Amount frozen: approximately NIS 409 million
•The urgent budget funds were released
•The case number is not specified in the source

What Was at the Center of the Dispute

On August 4, 2026, the Knesset Finance Committee approved special budget transfers totaling approximately NIS 2 billion. They included approximately NIS 409 million in coalition funds: NIS 286 million for the Ministry of Education—mainly for Haredi and religious education—and NIS 123 million for the Ministry of Settlement and National Missions. These sums were combined in a single budget package with urgent salary payments, payments to suppliers, funding for the opening of the school year, and the rehabilitation of affected areas.

Who Petitioned the Court

The transfers were challenged in a petition by Knesset member Naama Lazimi of the Democrats party and the nonprofit organization Hiddush—For Religious Freedom and Equality. The Court ordered the Speaker of the Knesset, the chair of the Finance Committee, and the Ministry of Finance to respond to the petition. The petitioners questioned the legality of transferring the coalition funds during the Knesset’s election recess.

What the High Court Ruled

On August 5, the Court temporarily halted the transfers, and on August 24, Justices David Mintz, Khaled Kabub, and Ruth Ronnen issued orders nisi and interim orders. The urgent funds were released, including reimbursement to local authorities for expenses related to the “School of the Great Summer Vacation” program and funds for the rehabilitation of communities in northern and southern Israel. However, approximately NIS 409 million in coalition transfers remained frozen pending further proceedings.

Why the Court Intervened

The Ministry of Finance insisted that the entire package must either be approved or frozen in full, even though the Court proposed separating the urgent expenditures. The interim order effectively separated the disputed coalition transfers from the urgent funding. The Court also required an explanation as to why the decision to transfer the funds should not be revoked, but the material presented did not include a final ruling on its legality.

No Final Decision Yet

Responses in the proceeding were required to be filed by September 10, 2026. As of September 27, 2026, no final decision on the petition had been published, and NIS 409 million remained frozen. The case number is not specified in the source.

What this means for you

The interim order shows that the Court can temporarily separate essential budget payments from disputed political transfers. This allowed local authorities, suppliers, and recipients of urgent funding not to wait until the proceeding concluded. However, freezing the NIS 409 million does not amount to final cancellation of the transfers: the question of their legality has not yet been decided.

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